Survival of the fittest? An inquiry into the factors related to the survival of social and commercial enterprises

There has been an increasing interest in the concept of social entrepreneurship, not only from a societal perspective but also from an academic perspective. Nevertheless, a common definition of social entrepreneurship has yet to emerge and the amount of empirical literature devoted to the topic remains scarce. An important contribution that this paper makes to the existing literature is that it carries out an in-depth empirical analysis using data from the Flash Eurobarometer Survey on Entrepreneurship 2009 (No. 283). More specifically, this paper examines which factors are related to the survival of social enterprises and if these factors differ for commercial enterprises. With the use of binary logit models this paper examines the association between the survival of (social) enterprises and several characteristics of the entrepreneurs responsible for those enterprises (education, age, risk attitude, growth preferences, and the willingness to change things) as well as external influences (a lack of financial support, a lack of information, and the variety of capitalism in the country in which the entrepreneur operates) and some control variables (gender, competitiveness, and having self-employed parents). The dependent variable in these binary logit models indicates whether the enterprise has survived for at least three years or whether it has failed. The models are estimated separately for social and commercial entrepreneurs. In addition, the same model is estimated for the complete sample, with an additional explanatory variable that indicates whether the entrepreneur is a social or commercial entrepreneur. A remarkable finding, which contrasts with a lot of previous literature and common perception, is that when the internal and external factors are included in the analysis, being a social entrepreneur is not negatively related to survival anymore. This important finding indicates that the common perception that social entrepreneurs have inferior performance, as compared to commercial entrepreneurs, can be explained by the different internal characteristics and external influences that social entrepreneurs face, which provides a promising outlook for the future of social entrepreneurship. Another important finding of this paper is that there are some notable differences between the factors related to the survival of social and commercial entrepreneurs; this highlights the importance of treating these two types of entrepreneurs as separate groups. Although these findings are interesting, more research is definitely needed to scrutinize the results and enhance our understanding of social entrepreneurs.